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Manhattan office prices go skyward
DANIEL TROTTA
Reuters News Agency
July 3, 2007
NEW YORK -- The Cathedral of Commerce once again is living up to its nickname.
The Woolworth Building, a 1913 Gothic masterpiece in downtown Manhattan, was set for conversion to luxury condominiums, but the price of commercial office space has risen so much that the owners changed course.
Instead of becoming one of the coolest places to live in New York City, the building will house luxury office space.
In a city where people pay $500,000 (U.S.) for a studio apartment, the owners - led by the developers Steven Witkoff and Ruben Schron - scrapped a seven-year-old residential plan in May in favour of the commercial project.
While the residential real estate market is flat, New York's commercial property market has been galloping ahead at least since 2003 or 2004.
Except for a blip following the Sept. 11 attacks of 2001, commercial real estate has been climbing since the recession of 1992, with the curve turning steepest in the past year.
"It's been an amazing run. It's just gotten insane. There's not enough product out there for all the money that's chasing it," said Peter Hauspurg, chief executive officer of Eastern Consolidated, a property services firm. "It's almost like values have lost their mooring."
Experts see few signs of a slowdown, if any.
"It's not driven by one sector. It's not only law firms, it's not only financial firms. It's across the board," said Steve Eynon, leasing director at the Empire State Building.
Like just about everywhere else in Manhattan, vacancies are down and rents are up at the Empire State Building. Rents rose 18 per cent in the past year and 11 per cent in the second quarter alone, Mr. Eynon said.
In the pricier Midtown district, eight blocks further north, monthly rents for class A space are up 34 per cent in the past year and up 74 per cent from a September, 2003, low point, according to brokerage Colliers ABR.
In all of Manhattan, office buildings valued above $5-million are selling for $730 per square foot in 2007, up 18 per cent from last year and up 143 per cent from 2004, according to Real Capital Analytics.
Meanwhile, apartment prices fell 2.4 per cent in 2006 and are down 18 per cent so far this year.
DANIEL TROTTA
Reuters News Agency
July 3, 2007
NEW YORK -- The Cathedral of Commerce once again is living up to its nickname.
The Woolworth Building, a 1913 Gothic masterpiece in downtown Manhattan, was set for conversion to luxury condominiums, but the price of commercial office space has risen so much that the owners changed course.
Instead of becoming one of the coolest places to live in New York City, the building will house luxury office space.
In a city where people pay $500,000 (U.S.) for a studio apartment, the owners - led by the developers Steven Witkoff and Ruben Schron - scrapped a seven-year-old residential plan in May in favour of the commercial project.
While the residential real estate market is flat, New York's commercial property market has been galloping ahead at least since 2003 or 2004.
Except for a blip following the Sept. 11 attacks of 2001, commercial real estate has been climbing since the recession of 1992, with the curve turning steepest in the past year.
"It's been an amazing run. It's just gotten insane. There's not enough product out there for all the money that's chasing it," said Peter Hauspurg, chief executive officer of Eastern Consolidated, a property services firm. "It's almost like values have lost their mooring."
Experts see few signs of a slowdown, if any.
"It's not driven by one sector. It's not only law firms, it's not only financial firms. It's across the board," said Steve Eynon, leasing director at the Empire State Building.
Like just about everywhere else in Manhattan, vacancies are down and rents are up at the Empire State Building. Rents rose 18 per cent in the past year and 11 per cent in the second quarter alone, Mr. Eynon said.
In the pricier Midtown district, eight blocks further north, monthly rents for class A space are up 34 per cent in the past year and up 74 per cent from a September, 2003, low point, according to brokerage Colliers ABR.
In all of Manhattan, office buildings valued above $5-million are selling for $730 per square foot in 2007, up 18 per cent from last year and up 143 per cent from 2004, according to Real Capital Analytics.
Meanwhile, apartment prices fell 2.4 per cent in 2006 and are down 18 per cent so far this year.
